Richard Spencer

March 18, 2008

The public is right to react so harshly to the Fed?s bailout of Bears Stern; however, I?m beginning to sense that most are not opposing it for the right reasons and are generally coming to the wrong conclusions. A headline that?s representative of the national mood reads, ?Homeowners need help, not Wall Street?Consumer groups decry Bear Stearns bailout while foreclosures soar?.

The Fed can only ?help? consumers by riving up the old printing press, and as bad as bailing out the Fed?s Wall Street friends was, simply buying up mortgages?that is, propping up bad loans with government cash?would have far worse effects. 

A little over a week ago, the price of Oil topped the inflation-adjusted record of the early ?80s. This had little too do with ?peak oil? or any nefarious Arab cartel and everything to do with the weakening of the U.S. dollar (the old greenback can?t get you as much crude as she used to). It might sound nice for the Fed to ?help,” but simply printing out more mullah will cause averages Americans lives to get much worse.